Trade secrets in Luxembourg

Trade secrets protection in Luxembourg: Comprehensive guide to safeguarding business confidential information under Luxembourg and EU legal framework. Innovation is not only a slogan but also a core driving force for the sustainable development of businesses. Breakthrough ideas, unique recipes, or optimized production processes – these are all valuable trade secrets, the culmination of continuous research and development. The protection of these intangible assets is not only a legitimate interest of businesses but also a key factor to encourage them to invest more strongly in research and development. When businesses feel assured about the security of trade secrets, they will be bolder in exploring new horizons, creating unique products and services, contributing to improving the competitiveness of the Luxembourg economy in the international arena. This not only benefits individual businesses, but also promotes the overall development of the entire business ecosystem, creating an innovative and dynamic business environment. Viet An Law would like to guide customers on how to protect trade secrets in Luxembourg through the article below.

Definition of trade secrets in Luxembourg

According to Luxembourg’s Trade Secrets Law, “trade secrets” is defined as any information that satisfies the following criteria:

• Confidentiality: Such information must be kept confidential, not common knowledge or easily accessible to people working in the relevant field.
• Commercial value: The information must bring economic benefits to the business through exclusivity.
• Protective measures: Businesses must take reasonable measures to protect such information from disclosure.

For example, information about customers, suppliers, unique production methods, business strategies, or market research results can all be considered trade secrets.

When is a trade secret protected in Luxembourg

The Law on Trade Secrets stipulates which cases the appropriation, use or disclosure of trade secrets is lawful and which cases are illegal.

The use or disclosure of a trade secret would be unlawful to do so without the consent of the trade secret owner and in violation of a confidentiality agreement or any other contract with the trade secret owner that restricts the use of the trade secret. However, the appropriation of trade secrets would be lawful, among other circumstances, when trade secrets were collected through independent discovery or creation or through any method consistent with honest trade practice.

To address issues related to press freedom or whistleblower protection, the Law on Trade Secrets provides exceptions for the illegal appropriation, use and disclosure of trade secrets made to:

• Exercise the right to freedom of expression and information, including respecting the right to freedom and diversity of the media;
• Disclosure of misconduct, misconduct, or illegal activity, provided that the person acts in the public interest;
• Disclosure by employees to their representatives (e.g. employee representatives) as part of the lawful performance of the functions of such representatives under EU or Luxembourg law, provided that such disclosure is necessary for such performance; or
• The purpose of protecting legitimate interests is recognized by EU or Luxembourg law.

Guide to protecting trade secrets in Luxembourg

Prior to the promulgation of the Trade Secrets Law, businesses in Luxembourg relied primarily on current legal provisions to protect their trade secrets, including:

• Criminal law: Article 309 of the Criminal Code clearly stipulates that the act of illegally using or disclosing trade secrets is a violation of law.
• Civil Law: According to Article 1382 of the Civil Code, the owner of a trade secret has the right to claim compensation for damage when their secrets are infringed.
• Contract Law: Confidentiality agreements in commercial contracts, labor contracts, etc. is also a legal basis for protecting trade secrets.
• Unfair Competition Law: Unfair competition practices, such as stealing trade secrets, are also strictly prohibited by law.

However, with the introduction of the Law on Trade Secrets, businesses now have more legal tools to protect this important intangible asset. Specifically, this law stipulates protective measures such as:

• Prohibition of infringements: Prohibition of illegal appropriation, use or disclosure of trade secrets.
• Remedial measures: Forcing violators to destroy infringing documents and products and compensate for damages.
• Expedited Proceedings: Allows the owner of a trade secret to initiate an emergency lawsuit to prevent damages.

As a result, businesses in Luxembourg can protect their trade secrets more effectively, contributing to protecting competitive interests and promoting economic development.